November 2024 Market Update
The pre-election jitters stifling market demand were extinguished in overwhelming fashion as Republicans regained a firm grip on the US government.
Unprecedented tariffs and the potential for re-inflation were apparently taboo subjects during the post-election rally. Wall Street is just too busy betting on market-friendly tax cuts and deregulation. In all fairness, stocks would tend to outperform in an inflationary environment.
Good Ol’ Bonds
If you want a more balanced outlook, talk to fixed income investors. Government and other high-quality bonds continue to drag as spreads tighten and long-term rates persist in drifting higher.
If a shift downwards in yields does emerge in investment-grade corporates and treasuries, we are well positioned to participate from upward trending bond prices.
Pie in Sky
Sometimes it feels like the markets are saying “everything’s fine” as the house burns around it.
Post-election investor sentiment is launching company valuations into low Earth orbit! And the bullishness extends beyond investors to voices in the real economy.
Several business surveys indicated improvements in the six-month outlooks of managers across the country. Meanwhile, real-time productivity measures show downbeat business activity.
How will the boom in sentiment shake out exactly? No one truly knows. For one thing, the stock market can stay at lofty levels longer than people expect. We’ll be watching closely.
The Trend Is Your Friend, Until It’s Not
Several portfolios started to maneuver toward leading pockets of the market such as high yield bonds, small-caps, and quality large-cap equities. FSA Safety Nets® guided several moves as well, trimming back international and commodity exposure.
It’s important to remember that FSA’s active strategies do not follow contrarian rules (i.e., sell at perceived highs or buy at perceived lows). We invest according to your goals, and we stick to our core principles: Follow the money, maintain an exit plan.
Please contact your advisor if you are experiencing any changes that affect your investment objectives and how we manage your money.
Jordan Daugherty, CFA
Senior Investment Analyst
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